Job retention? Why not let someone else take the strain?

The government Coronavirus Job Retention Scheme has been welcomed by employers and employees alike. But it's not without its complexities argues JACK MOORE of Page Kirk. Maybe it's time to call in some help?

It may be that your business has already taken advantage of the UK government programme that allows you to furlough workers and claim 80% of their salary. It's thought that millions of workers may potentially benefit from the Coronarvirus Job Retention Scheme (CJRS). But if you're yet to embark on the process, it might well be worth calling in professional help, as there are more complexities than you would think.

Here are just some of the issues that arise:

Your employee is furloughed for part of the permitted three-month period

You can only claim for the actual period they were furloughed. And that means the point at which they stopped working – not the time you made the decision.

Payment of NI and pensions

You can claim back these contributions, but still need to pay them in the normal way. Any non-mandatory contributions are your responsibility and won't be refunded by the government.

Employees are off sick before they are furloughed

It's not possible to furlough someone because of sickness or self-isolation, but it is possible to furlough someone for business reasons while they are off sick. At that point, the employee should transition from Statutory Sick Pay to the CJRS.

Topping up wages

While you don't have to top up employees' wages, you can opt to do so if you wish. Remember, however, that you will have to cover any additional Employer National Insurance contributions due.

NI and Employment Allowance issues

The maximum grant for NI contributions can only ever match the amount you are due to pay. You need to deduct any Employment Allowance in a period to calculate the total NI. If you're not paying any NI as a result of the EA, you can't make any claim of NI costs for furloughed workers in that period at all.

Furlough dates

It may be that different employees have been furloughed at different points in the period for which you're making a claim, leading to more complex pro-rata calculations.

National Living Wage/National Minimum Wage/Apprentices Minimum Wage

It's the hours someone is working – or treated as working – that determine entitlement to the National Living Wage, National Minimum Wage and Apprentices Minimum Wage. A furloughed worker can be paid either 80% of their wages or £2,500 (whichever is lower), even if this is below their usual minimum wage.

Training

You can encourage your furloughed employees to take part in training, although they cannot be providing services in the process or generating revenue. Make sure that you include training time in the calculations for minimum wage, as it is considered to be working time.

Non-monetary benefits

If an employee receives Benefits in Kind (medical insurance, a company car or benefits from a salary sacrifice scheme, for instance), do not include these when making a salary claim. To find the reference salary, you will need to deduct the relevant figures from the salary total.

As you can see, there's a lot to bear in mind. It's understandable if some businesses – particularly with plenty of other issues to worry about right now – find the prospect of managing the process off-putting. That's where Page Kirk can step into help. Give us a call on 0115 955 5500 or email us at enquiries@pagekirk.co.uk to find out more about the services we can provide.